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What makes an LPA such an in-demand document? Why is it vital for elderly people who are prone to have illnesses such as Alzheimer’s or dementia? Should an LPA be limited for elderly only? Can people who are of good health make an LPA as well? What are the risks of making an LPA?

In the previous blog, the topic of the importance of an LPA for the elderly has been stressed. Now, the discussion will be about the five important points to consider when making a Lasting Power of Attorney.

5 Important Points To Consider When Making an LPA

1.Takes effect during incapacity.

A Lasting Power of Attorney or LPA for short is a legal document that permits/allows someone to appoint one or more persons to make decisions for him or her. The person who makes the LPA is called the donor. And the persons the donor designates to makes or act on his or her behalf is called the donee.

When the Lasting Power of Attorney is made, using an LPA form taken from the Office of Public Guardian, it does not take effect immediately. Many people believe that misconception that the moment one signs and LPA it is implemented then and there. But, a Lasting Power of Attorney doesn’t work like that. A Lasting Power of Attorney will only take effect when the donor becomes mentally incapable of handling his or her expenses. If a man has a Lasting Power of AttorneyLPA made today, it will just take effect when he grows old and probably has dementia or another kind of illness that prevents people from making logical decisions. Or in another situation, the man gets into an accident which results in him going into a comma. Only then will the Lasting Power of Attorney come into action, not when the man is in good mental health.

2. It has limited powers.

“A Lasting Power of Attorney gives a donee full control of the donor’s life” this statement is false. A Lasting Power of Attorney has control over the financial aspect of a donor’s life once he becomes incapacitated but not his whole life. Below is the list of things that a donee has no control over:

  • Marriage
  • Anything of sexual nature
  • Divorce
  • Adoption
  • Renouncing or adopting a religion
  • Treatment for a change in gender
  • Revoking or consenting to a sexual sterilisation treatment
  • Abortion
  • Withdrawing or registering the removal of an organ from any person upon death
  • Revoking or making an advance medical directive
  • Revoking or making a gift of a body or any part of a body
  • Making a will
  • Revoke or make nominations to insurance and CPF
  • Give any donation of any property belonging to the donor

The donee cannot force or consent to any of the following stated above. He or she cannot force a marriage, an abortion, a divorce, etc. But there are things that a donee has control over, here’s the list:

  • Where the donor lives
  • Who he or she lives with
  • Day to day care decisions (what to wear etc.)
  • Social activities to take part in
  • Handling personal correspondence
  • Who he or she communicates with
  • Dealing with property
  • Bank accounts
  • Receiving income
  • Handling tax issues
  • Paying debts or other necessities
  • Purchasing things needed by the donor

3. Can be individuals or groups of people.

The donor can appoint one or more donees. There is not a maximum amount of donees that a donor can nominate. But, caution should be practised. Too many donees will have problems because they may not all agree on the same decision. The Lasting Power of Attorney forms though specifies or allows for the appointment of only two donees.

Two or more donees can make decisions on the same matter, but a donor can dictate who decisions should be passed. It can be:

Jointly which means the donees have to act together and not separately.

Jointly and severally – both the donees can make decisions together or separately.

Should the donor fail to specify how the donees should act then, the law assumes that they should work jointly.

4. Making one is not hard.

To make an LPA, a person just needs to get an LPA document or LPA form. The donor must :

  • Complete and sign the Lasting Power of Attorney Form.
  • Have certificate signed by the certificate issuer, the donees, and replacement donees
  • Register the LPA form
  • Submit the  signed original LPA form and application form to the Office of the Public Guardian
  • Pay the registration fee.

5. It can be canceled.

A Lasting Power of Attorney is a revocable instrument. And the donor may revoke or cancel the LPA if he or she has the mental capacity to do so. To cancel a Lasting Power of Attorney, the donor must notify the Public Guardian that he or she wants to revoke the Lasting Power of Attorney. The registered Lasting Power of Attorney must be delivered to the Office of the Public Guardian to be canceled. It is a must that the donor also notifies the donees about the cancellation.

A Lasting Power of Attorney is also canceled when the donor dies. If the donee named is a spouse of the donor and they have a divorce when the donor is still mentally capable, then the Lasting Power of Attorney is canceled. Unless the donor specifies in his or her LPA that the donee may continue to be a donee despite a divorce.

Final Thoughts

An LPA or a Lasting Power of Attorney is a document created to help protect people who have become mentally incapable of being deceived or robbed by individuals with mal-intent. And it takes effect only when the donor becomes mentally incompetent, and doesn’t have full control over a donor’s life. Making one is easy, and it is revocable. So, with all these in place why is it hard for people to make one? Isn’t prevention better than cure? And when it comes to millions, avoiding the problem is better than having to go through trials to get monies back.

Learn more about estate planning by getting the book “The Rockwills Guide to Succession and Trusts in Wealth Management”, by Chiwi Lee.

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